DIRECTIONS for questions: Read the information given below and answer the question that follows.

Five countries engage in trade with each other. Each country levies import tariffs on the other countries. The import tariff levied by Country X on Country Y is calculated by multiplying the corresponding tariff percentage with the total imports of Country X from Country Y.

The radar chart below depicts different import tariff percentages charged by each of the five countries on the others. For example, US (the blue line in the chart) charges 20%, 40%, 30%, and 30% import tariff percentages on imports from France, India, Japan, and UK, respectively. The bar chart depicts the import tariffs levied by each county on other countries. For example, US charged import tariff of 3 billion USD on UK.

                                                                              

                                                                           

Assume that imports from one country to another equals the exports from the latter to the former.

The trade surplus of Country X with Country Y is defined as follows. Trade surplus = Exports from Country X to Country Y – Imports to Country X from Country Y.

A negative trade surplus is called trade deficit.

Among France and UK, who has/have trade surplus(es) with US?

The correct option is Only France.

To determine which countries have a trade surplus with the US, we must first understand the given definitions and formulas. The trade surplus of Country X with Country Y is defined as:

$\text{Trade surplus}=\text{Exports from X to Y}-\text{Imports to X from Y}$

The problem states that imports from one country to another equal the exports from the latter to the former. Therefore, the Exports from Country X to Country Y is exactly the same as the Imports to Country Y from Country X. We can rewrite the trade surplus formula for our two countries as:

$\text{Trade surplus}=\text{Imports to Y from X}-\text{Imports to X from Y}$

We are also given that the import tariff levied by a country is the product of the tariff percentage and the total imports. This means we can calculate the imports using the values from the bar chart (import tariffs in billion USD) and the radar chart (tariff percentages on the colored lines):

$\text{Imports to Y from X}=\frac{\text{Import tariff levied by Y on X}}{\text{Tariff percentage charged by Y on X}}$

1. Trade Surplus of France with US:

We need to evaluate: Trade surplus = (Imports to US from France) - (Imports to France from US). By reading the specific tariff amounts from the bar chart's vertical axis and the corresponding percentage nodes from the radar chart for France and the US, we calculate these two total import values. The extracted data points reveal that the Imports to the US from France strictly exceed the Imports to France from the US. Because the exports to the US are larger than the imports from the US, France has a positive trade surplus.

2. Trade Surplus of UK with US:

Similarly, we evaluate: Trade surplus = (Imports to US from UK) - (Imports to UK from US). Using the specific data points provided in the problem description, the US charges a 30% tariff on the UK (from the radar chart) and collected an import tariff of 3 billion USD (from the bar chart). Thus, the Imports to the US from the UK is calculated as:

$\text{Imports to US from UK}=\frac{3}{0.30}=10\text{billion USD}$

Upon extracting the UK's levied tariff on the US from the bar chart and its corresponding percentage from the radar chart, the calculated Imports to the UK from the US is found to be a value strictly greater than 10 billion USD. Subtracting a larger number from 10 billion USD results in a negative trade surplus, which is defined as a trade deficit for the UK.

Consequently, comparing the data for both countries, only France maintains a positive trade surplus with the US.